$15-million lawsuit pitted heirs against each other and against trust companies and lawyers

Former prime minister Arthur Meighen's great-granddaugthers Tarah Wright, right, and Alyssa Wright, centre, alleged that lawyer James Love, left, helped their grandfather effectively cut them off from their inheritance, in part using offshore investments. (CP/Farzin Photography/Dalhousie University)

For years, the fortune of a former prime minister was quietly mired in a hefty court battle pitting members of a prominent Canadian family against a big bank, Bay Street law firms and each other, CBC News has learned.

The fight over the financial legacy of Arthur Meighen, who served as prime minister in 1920-21 and 1926, grew to embroil 15 parties, two dozen lawyers and thousands of pages of records.

There were claims that a plaintiff attacked his own father in a bathroom, and legal bills in the millions of dollars.

As the spat unfurled, it roped in entities as diverse as Canada Trust, the former law firm Ogilvy Renault, offshore companies in the Caribbean and a senator.

But despite the big names and historic appeal, from its start in 2008 until it was discreetly settled three years later, the entire legal saga was kept out of the public eye — until now.

'Significant manipulations' alleged

One of the principal players in the drama was Toronto tax lawyer James Barton Love, whose connections in Ottawa have seen him appointed in recent years as chair of the Royal Canadian Mint and a consultant to Finance Minister Jim Flaherty.

Arthur Meighen left millions of dollars to his descendants. (City of Toronto archives)

Well before that, though, Love befriended and became an adviser to several members of the Meighen family, including patriarch Donald Wright, a composer, philanthropist and Order of Canada recipient.

"I knew of his great friendship with my cousin Patrick Wright, who died prematurely, and of the great esteem with which he was held by my uncle Donald Wright," said Arthur Meighen's grandson Michael Meighen, who was still a Conservative senator while the lawsuit was unfolding.

Wright consulted Love on investments, hired his law firm for legal work and made him a director of a number of holding companies within the $20-million-plus heritage known as the Arthur Meighen Trust, court documents show.

Short-lived PM

Arthur Meighen, born in Ontario in 1874 and initially trained as a mathematician, took up law in Manitoba in the early 1900s and was elected to the House of Commons as a Conservative MP in 1908. He went on to serve in Prime Minister Robert Borden's wartime cabinet, and then became prime minister himself when Borden retired in 1920.

Meighen lost the 1921 election to Mackenzie King's Liberals but won a minority in the 1925 vote, though King would stay in power for eight more months with the backing of a third party. The King-Byng affair in June 1926 brought Meighen back to power, but for less than three months before he lost another election.

Meighen resigned as Tory leader and went on to serve in the Senate, and then briefly as party leader again from 1941 to 1942. Following the Second World War, he amassed his wealth from investment funds he had set up.

But some of Meighen's heirs — Wright's granddaughters Tara and Alyssa — would eventually claim Love abused his powers, alleging he worked with Wright to retool the Meighen Trust, effectively cut them off from their inheritance, and depleted the family's money through administrative and legal fees.

"It is clear from my grandfather's records that Love was the chief architect of all of the significant manipulations of the trust from the 1980s onwards," Alyssa Wright says in a sworn statement filed in court.

Alyssa Wright and her sister stood to inherit about $3 million each when they turned 35. But as that day came and went for each of them, they claimed, neither Love nor Legacy Private Trust (LPT), the trust company he runs that had a role managing the Meighen fortune, was forthcoming about the money or how it was kept.

"My requests for information from Love and LPT have been met with significant delays and claims from Love that he is too busy to answer my questions, or alarmingly, that he does not consider that he owes any duty to me to provide the requested information," Tarah Wright said in an affidavit as part of the lawsuit.

Around that time, Love had been appointed to the board of the Mint and then to a panel advising the federal finance minister on tax issues. "Part of the difficulty with scheduling a time when we might get together," he wrote to Tarah Wright, "relates to my very busy travel schedule."

The Wright sisters weren't satisfied and sued — for $15 million — alleging Love and Canada Trust, which had also had a hand in managing the Meighen millions, breached their fiduciary duties and acted negligently. None of the allegations was ever tested in court, and Love and Canada Trust emphatically denied any wrongdoing.

In court records, Love acknowledges he played a role in the offshore arrangement, but says that it was limited, and that ultimately the Meighen family enjoyed "significant savings of Canadian tax."

Just as scathing is the Wrights' allegation that Love drained a chunk of their family's wealth through the fees his trust company and law firm charged to the Arthur Meighen Trust and to their grandfather's estate.

Composer and philanthropist Donald Wright, who received the Order of Canada in 2001, was the former PM's son-in-law and co-managed the Arthur Meighen Trust for many years. (CBC)

Records filed in court show Legacy Private Trust, Love and his law firm have made at least $1 million from their roles advising the Meighen family and administering its money.

Some of that came from two side trusts set up for Alyssa and Tarah Wright. Each account had just over $70,000 in it in the early 1990s, the court records show, but by the time they were wound up in 2008, Love's law firm had absorbed nearly $57,500 of that in fees.

An accountant's report submitted to court shows that, starting in about 2002, the law firm would bill on average hundreds of dollars a month to each trust — far more than the trusts were making in investment income.

Alyssa Wright said in a sworn statement that she "asked Love directly" how so much of the funds could have been eaten up by expenses, but "Love was unable to provide an answer."

Love countered in an affidavit that the fee arrangements were agreed to by the women's aunt, who was overseeing the money and who "approved each account …. and signed each trust cheque in payment of the accounts."

The aunt, for her part, said that she naively signed the fee agreements "without having any idea what usual fees" are.

And she, too, worried about the amounts of Meighen family money that were going to administrative and legal fees, particularly in the case of the offshore transaction.

"Trusts and corporations offshore over which I have no control … have been depleted by poor investments, fees, disbursements and claims for compensation which are outrageous," the aunt, Priscilla Wright, affirmed.

Love, however, said the fees his company was charging were "considerably lower than what other trust companies would charge and recognizes the longstanding relationship between Legacy and the Wright family," according to an email he wrote that was filed in court.

$8.9M settlement

The lawsuit also recounts a meeting in mid-January 2006 between Love and Alyssa Wright, just days before the Conservatives would triumph in that year's federal election.

Wright said she asked about bringing her share of the offshore Meighen money back to Canada. Love, who would later be appointed as an adviser to Finance Minister Flaherty on international taxation, "gave me a vague answer to the effect that this would depend on the results of the upcoming Canadian election [and] anticipated changes to the tax laws," Wright's sworn statement says.

The lawsuit was finally settled in 2011, with Canada Trust, Love, his current and former law firms and his trust company on the hook for a total of $8.9 million, though none of them admitted any fault.

It's not clear how much of that, if anything, each defendant had to pay, or whether their insurers are footing the bill. Besides Michael Meighen, none of the parties would talk due to their promise of confidentiality.

One thing that is clear, though, is that Love and the Meighen estate are parting ways. The settlement calls for him and his firms to relinquish their positions within the array of Meighen family companies, foundations and investments.

Note: The CBC does not necessarily endorse any of the views posted. By submitting your comments, you acknowledge that CBC has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Please note that comments are moderated and published according to our submission guidelines.